The Inductive Wear Debris Sensor is a relatively new invention that is increasingly being used for the detection of incipient machinery damage or failures by sensing metallic debris in lubrication systems. This type of sensor is typically used in-line and has a superior particle size detection range compared to traditional techniques such as the ubiquitous spectrometric oil analysis. There is, however, very little in the literature regarding the application and interpretation of data arising from this type of sensor. Unlike other condition monitoring sensors, no data will be generated by an Inductive Wear Debris Sensor in an ideal system; however, in real applications it is necessary to discriminate between occasional particles unrelated to a failure and incipient failure particles. Inductive Wear Debris Sensor data could be misinterpreted if a simple cumulative count limit was applied to the data. A short-term rate of particle generation is sometimes used as an alternative; however, it too can be misleading with short succession particles producing high instantaneous rates possibly causing false alarms. The purpose of this work was to develop a robust metric (or group of metrics) that when applied to Inductive Wear Debris Sensor data would reliably identify a failure event and exclude non-failure related particles. The Health Indicator described herein consists of three subordinate Condition Indices that collectively are shown to reliably detect the onset of rolling contact fatigue. The metrics have been applied to bearing test rig data (seeded fault) and data obtained from a non-seeded fault test of a complex helicopter gearbox.